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Introduction of Group Companies
From Value One Spring 2005 No. 8
Metal One Structural Steel & Resource Corporation earns some 400 billion in sales, the largest of any single Metal One Group company. Following the integration of the construction steel subsidiaries of Mitsubishi Corporation and Nissho Iwai Corporation, it is now attracting attention as a symbolic Metal One Group company.
Becoming Stronger through Integration

After leaving the mill, steel passes through a labyrinth of distribution channels by the time it reaches the end user. A "short, thick steel distribution" channel - one of Metal One's major targets - implies simplification of this labyrinth into an efficient highway. As for the construction steel business, President Naoto Matsuoka noted: "We have to integrate the intermediary function of trading houses and the stock managing and processing functions of official dealers. Otherwise, we will not be able to minimize the length of the distribution channels." The company is responsible for 20% of Metal One Group's total sales. "We are naturally expected to make commensurate contributions to Group profits," President Matsuoka explains. "Last year, we built the framework; this year we must flesh it out."

Metal One Structural Steel & Resource, which deals in construction steel and processed ferrous raw materials, was launched in April 2004, one year after the start of Metal One. The construction steel business was positioned differently between the two parent companies. For Mitsubishi, it had been an internal operation, but Nissho Iwai had completely transferred its business to domestic subsidiaries. So, after a certain preparatory period, Nissho Iwai Structural Steel Co., Ltd., and MC Metaltech Corporation merged to establish Metal One Structural Steel & Resource Corporation. In July, Metal One transferred its construction steel business in the Tokyo, Nagoya and Osaka areas to the new company, which, at the same time, integrated the construction steel and processed ferrous raw materials operations of Metal One Steel Products Corporation, which had taken over Nissho Iwai's construction steel business in the Kansai region. Thus, the transfer of business functions was largely completed by the end of 2004.

The functions of trading houses and those of official dealers had cohabited in the construction steel sector, but the most significant feature of Metal One Structural Steel & Resource is the fusion of these functions through the logistics bases (steel centers) it owns and operates. President Matsuoka, looking ahead to the future of construction steel distribution, elaborates: "A new form of distribution will be created by combining the strengths of both: the trading houses' information and financial resources and the official dealers' know-how in stock management and processing. This will bring us closer to the end users." For such organizations to come together and demonstrate a new mobility, the merged body must inevitably face some challenges. Among these, President Matsuoka identifies "collaboration among sectors, risk management and greater efficiency of operations" as challenges that need to be addressed immediately.

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